The 15 Security Council members began meeting late on Thursday and remained behind closed doors for two hours until early Friday morning to discuss the three-sentence statement.

But council diplomats said one phrase in it was unacceptable to the Georgians, backed by the United States and Europeans. That wording called on all sides in the conflict "to renounce the use of force," according to a draft of the text.

After failing to agree, the council decided not to take any action on the issue, the diplomats said.

(...)

French, British and other Western envoys also called for all sides to stop fighting and resume negotiations. French Deputy Ambassador Jean-Pierre Lacroix told reporters the council would probably come back to the issue.

AFP has this:

Belgium's UN Ambassador Jan Grauls, who chairs the council this month, said members "expressed serious concern at the escalation of violence and asked for an immediate resumption of dialogue".

But he also acknowledged that, due to the late hour, the 15-member council "was not in a position" to agree on a text.

The key sticking point, according to Russian Ambassador Vitaly Churkin, was "the reluctance" of some council members to accept a reference to the need for the warring parties "to renounce the use of force."

(...)

The Georgian envoy said several council members backed his call on Russia to end "the transit of military equipment and mercenaries" through its territory in support of the South Ossetia separatists.

Meanwhile France's deputy ambassador Jean-Pierre Lacroix urged "an immediate resumption of dialogue with a view to a ceasefire," warning that the escalating violence was "a clear threat to peace and security in the region."

Xinhua has this:

Diplomats said that during the closed-door consultations, the council failed to reach an agreement on the Russian text because some council members, including the United States, opposed the part calling on the parties to "renounce the use of force."

Kommersant notes this (not about UNSC, but about reactions):

EU Demands an Immediate Stop to the Violence, U.S. Wants Russia to Stop It

The European Union is extremely concerned about the development of events in South Ossetia and is calling on all sides in the conflict to stop the violence in the region immediately, Reuters reports. "We are following this very closely, we are very concerned by how the situation is evolving," an EU official told the information agency, who added that the EU is in contact with all interested international parties, including the United States, Russia and the Organization for Security and Cooperation in Europe.

An American senator made a similar appeal earlier, although his interpretation of the events had a twist. Chairman of the Senate Foreign Relations Committee Joseph R. Biden, Jr. (D-DE) called on Russian peacekeepers to put an end to the military action. The world is watching Russia's actions, and so Moscow should take immediate action to restore peace in South Ossetia, Biden said.

Biden also praised Georgian President Mikheil Saakashvili for urging calm and restraint in the region. Clearly Biden, like many other American politicians, prefers to believe the official position of Tbilisi that South Ossetia began the military actions by attacking Georgian villages and Russian peacekeepers are helping the separatists.

CNN also reflects that different take, with this title: Russians accused of 'bombing' Georgia as violence escalates...

In the long run, we're all dead. John Maynard Keynes